Penhalonga Gold Project

The project is located in the Mutare Greenstone Belt which extends eastward into Mozambique and is considerd to be one of the richest greenstone belts in Zimbabwe in terms of gold production per unit area at 122kg Au/km2. Historical production from the Penhalonga valley between 1897 and 1937 amounted to 1.3 Moz Au, 1.6 Moz Ag, 7,300t Pb and 5.2t Cu. The project is located opposite Metallon’s Redwing Gold Mine that has produced 3.6 Moz Au to date (remaining resources of 2.5 Moz Au) and has restarted production following a period of care and maintenance. Along strike and across the border in Mozambique several large gold projects have been developed such as Xtract Resources plc’s Manica Fair Bride Au Project that has just had a DFS completed. The proposed operationmis based on total compliant resources of 14Mt grading 1.7 g/t Au. Other operations include the Monarch Mine, Guy Fawkes, Revue and Boa Esperance gold projects.

History

The Penhalonga Gold Project consists of a number of shear and vein hosted gold deposits along the southern side of the Penhalonga Valley covering a strike length of some 3.5km (and an area of approximately 1.8km2), including the historic Battersea Gold Mine as well as the dormant Penhalonga Gold Mine located 5km north of Mutare. Historical production from the Penhalonga Mine between 1895 – 1943 was 185 000 oz Au from two main shafts as well as numerous adits located within the talcschist target lithologies. At present artisanal mineral are producing 1-2kg/month at grades averaging 10g/t.

Historical mining focused on near surface oxide resources with approximately 750m of strike being tested to date, with the deeper sulphide resource extending at depths >1km.

Recent Exploration

Several phases of exploration have been completed over the Penhalonga Project since the 1960’s. Rio Tinto Zimbabwe initially completed a series of deep drilling in 1962 that comnfirmed the strike extent as well that the Au bearing zones were continuous at depth. Follow up adit sampling by Casmyn /New Dawn Mining Corporation in 200 confirmed grades of >10g/t Au. This was followed by an airborne high resolution magnetic survey in 2009 (completed by ZMI) that identified a 100m wide shear zone with a strike length of at least 1.5km co incident with the current Au occurences located along the Penhalonga Valley. ZMI followed up with 2400m of drilling that delineated a shallow resource of 0.5Mt grading 2.2g/t Au to 30m depth (Oxide to transition).